Identification Revolution: Can Digital ID be Harnessed for Development?

By Alan Gelb and Anna Diofasi

Some 600 million children worldwide do not legally exist. Without verifiable identification, theyand unregistered adultscould face serious difficulties in proving their identity, whether to open a bank account, purchase a SIM card, or cast a vote. Lack of identification is a barrier to full economic and social inclusion.

Recent advances in the reach and technological sophistication of identification systems have been nothing less than revolutionary. Since 2000, over 60 developing countries have established national ID programs. Digital technology, particularly biometrics such as fingerprints and iris scans, has dramatically expanded the capabilities of these programs. Individuals can now be uniquely identified and reliably authenticated against their claimed identities. By enabling governments to work more effectively and transparently, identification is becoming a tool for accelerating development progress. Not only is provision of legal identity for all a target under the Sustainable Development Goals, but this book shows how it is also central to achieving numerous other SDG targets.

Yet, challenges remain. Identification systems can fail to include the poor, leaving them still unable to exercise their rights, access essential services, or fully participate in political and economic life. The possible erosion of privacy and the misuse of personal data, especially in countries that lack data privacy laws or the capacity to enforce them, is another challenge. Yet another is ensuring that investments in identification systems deliver a development payoff. There are all too many examples where large expendituressometimes supported by donor governments or agenciesappear to have had little impact.

Identification Revolution: Achieving Sustainable Development in the Digital Age offers a balanced perspective on this new area, covering both the benefits and the risks of the identification revolution, as well as pinpointing opportunities to mitigate those risks.

• Language: English
• Publisher: Center for Global Development
• Release date: Dec 30, 2018
• ISBN: 9781944691042

Book preview

Praise for

Identification Revolution: Can Digital ID Be Harnessed for Development?

Alan Gelb and Anna Diofasi Metz have done a remarkable job of studying recent advances in the sophistication of ID systems across the globe. They offer a unique lens on what is possible, what has been done, and more importantly, why it was done. This kind of a critical look at the design choices of an ID system is illuminating especially since they capture the context in which those decisions were taken. Legal identity to all is a development target in the SDGs, and many other SDG goals will depend on it. Hence, the developing world will need experts who understand the power and innovation capability of identity systems. With this book, Alan and Anna have shown their deep understanding of ID systems at a global level.

Nandan Nilekani

Co-founder and Non-Executive Chairman, Infosys; Founding Chairman, Unique Identification Authority of India; Co-founder and Chairman, EkStep Foundation

It is no exaggeration that there is an Identification Revolution and it is important and moving rapidly. [This book’s] masterful presentation brings the reader up to date, analyzing the potential benefits and pitfalls of biometric ID. This is a must-read for all those interested in economic development and the potential that the ID Revolution offers.

Anne O. Krueger

Senior Research Professor, Johns Hopkins School of Advanced International Studies; Senior Fellow, Stanford Center for International Development

Digital ID is fast becoming an essential tool for twenty-first century development. This book spells out in fascinating detail the opportunities and challenges, the perils and pitfalls of this digital ID revolution.

Ngozi Okonjo-Iweala

Board Chair, GAVI; former Finance Minister, Nigeria; former Managing Director, World Bank

"This is a must-have manual for anyone interested in the important topic of identification systems as drivers of social and economic development. The book is written with exceptional depth and clarity compatible with the exceptional status of its authors as individuals who have followed and have contributed first hand to the advancement of our knowledge about the impact of identity systems on society. The book not only presents the positive consequences of identity schemes, but does a great job explaining some of their risks. The authors outline ways for how to address these risks and for how to channel identity systems within responsible frameworks that respect human rights, enhance gender equality, fight against discrimination, and protect privacy in various contexts.

I found the book sober, thoughtful, and pragmatic in its recommendations and thus [it] should be of great utility to practitioners from development agencies as well as government identity authorities and policymakers.

It is a pleasure to finally see a comprehensive and timely account that has staying power—one that I expect will remain a top reference in this field for many years to come."

Joseph Atick

Executive Chairman, ID4Africa; Executive Chairman, Identity Counsel International

Anyone interested in the current transformation of identification and registration systems underway internationally—students, researchers, policymakers or implementers—should begin with this book.

Keith Breckenridge

Professor and Deputy Director, Wits Institute for Social and Economic Research

Methods for identification have been fundamental for human groups and for the scale of their political and economic activities throughout history. It is no accident that the first industrial nation, England, innovated the first nationwide identity registration system nearly 500 years ago. But ID systems can also be abused, resulting in terrible consequences. Digital ID in the age of the internet offers a transformative opportunity for citizens of the poorest states at last to acquire their rights to recognition, but it is equally vital that they be protected against potential abuses or exploitation of their economic vulnerabilities. Alan Gelb and Anna Diofasi Metz are to be thanked for their timely intervention in providing an authoritative review of this fast-changing field and its current best practices in, for instance, Estonia and Peru. This excellent book affords invaluable practical guidance for states and governments hoping to reap development gains while avoiding the serious pitfalls in engaging with this most important governance revolution of the third millennium CE.

Simon Szreter

Professor of History and Public Policy, University of Cambridge

IDENTIFICATION REVOLUTION

Can Digital ID Be Harnessed for Development?

ALAN GELB and ANNA DIOFASI METZ

CENTER FOR GLOBAL DEVELOPMENT

Washington, D.C.

Copyright © 2018

CENTER FOR GLOBAL DEVELOPMENT

2055 L St. N.W.

Washington, D.C. 20036

www.cgdev.org

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the Center for Global Development.

Library of Congress Cataloging-in-Publication data are available.

Names: Gelb, Alan H., author. | Diofasi Metz, Anna, author.

Title: Identification revolution : can digital ID be harnessed for development? / Alan Gelb, Anna Diofasi Metz.

Description: Washington DC : Center for Global Development, [2018] | Includes bibliographical references and index.

Identifiers: LCCN 2017035951 (print) | LCCN 2017054551 (ebook) | ISBN 9781944691042 | ISBN 9781944691035 (pbk. : alk. paper)

Subjects: LCSH: Biometric identification—Economic aspects. | Sustainable development.

Classification: LCC HD9999.P3952 (ebook) | LCC HD9999.P3952 G45 2018 (print) | DDC 338.9—dc23

LC record available at https://lccn.loc.gov/2017035951

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Contents

Preface

Acknowledgments

ONE

Introduction

Why Does Identification Matter for Development?

How Is the Identification Landscape Changing in the Digital Age?

From Identification to Development: Challenges and Risks

What Does the Identification Revolution Mean for Development Organizations?

Summary Overview

TWO

How Big Is the Global Identification Gap? Can We Measure It?

How to Interpret Legal Identity in the Context of Sustainable Development

Birth Registration

National Identification and Similar Programs

Voter Cards and Other Functional Forms of Official Identification

Toward Bridging the Identification Gap

THREE

Identification as an Enabler of Sustainable Development

Access to Finance and Economic Resources

Gender Equality and Empowerment

Access to Basic Services

Child Protection

Labor Market Opportunities

Social Protection: Grants and Subsidies

Managing Public Payrolls

Tax Collection

Clean Elections

FOUR

Identification Systems: Innovations in Technology and ID Provision

Biometrics in Identity Management

Identity First: An Alternative to National ID?

Lifetime Identification and Young Children

Managing Identification Services: Toward Autonomous Providers?

Integration between Registries and Programs

FIVE

Confronting the Risks

Exclusion Risk

Privacy Risk

Identification as Investment: Do the Benefits Justify the Costs?

The Political Limits of Identification

Balancing the Returns and the Risks

SIX

Five Frontier Cases in Digital Identification

Peru: Registration and Identification as a National Priority

Estonia: e-ID Pioneer

India: The UID (Aadhaar) Program

Federated Identification: GOV.UK Verify

Networks and Crowd-Sourced Digital Identities

Innovative Features of the Cases

SEVEN

Toward the Future

Can Digital Identification Be a Good Investment for Development?

Toward a More Strategic Approach for Development Partners

Shared Principles for Development-Focused Identification Systems

Areas for Further Research

References

Index

About the Authors

Preface

Digital identification programs are being rolled out at a dizzying pace across the developing world. Within the last fifteen years, over sixty low- and middle-income countries have launched foundational national identification (ID) programs. In addition, many public and private entities have rolled out their own functional ID programs to serve a number of specific purposes, whether for registering voters, delivering social transfers, or enabling financial institutions to satisfy enhanced regulatory requirements. Advances in digital technology, notably multimodal digital biometrics and mobile technology, have greatly enhanced the capabilities of these systems and expanded their reach across a more mobile, digitally connected world.

Identification is, of course, only one manifestation of the explosive spread of digital technology, with all of its implications. It is, however, an important one: the identification revolution foreshadows a major change in the relationship between citizens and states. With the rollout of modern digital ID systems, citizens are becoming better equipped to exercise their rights and to prove with unprecedented certainty who they are, in both the physical and the virtual realms. ID systems offer the opportunity to regularize the situation of over a billion people—often the poorest and most vulnerable members of their community—who today lack any effective proof of their identity. As for states, they can utilize their digital ID programs to deliver services and transfers with greater effectiveness, precision, and transparency than ever before.

In this book, Alan Gelb and Anna Diofasi Metz address the question of how to maximize the development impact of this identification revolution. Ensuring legal identity for all, including birth registration by 2030 has been recognized as Target 16.9 of the Sustainable Development Goals, but there is no consensus on exactly how to define legal identity in the development context and how to reach the target. As the book demonstrates, effective and inclusive identification systems can facilitate the achievement of this and many other SDG targets; they can widen access to real and financial assets, support gender equality, and reduce corruption. But much depends on how the new systems are designed, rolled out, and used. Any system set up to include can also exclude—some are not able to use the new systems and technologies, while others face an enhanced risk of statelessness. Personal data can be stolen and be (mis)used in ways that harm people rather than benefit them; many developing countries lack data privacy laws or the capacity to enforce them. Investments in identification systems and technology can generate high economic and social returns, but many countries have been wasting large sums on poorly conceived and implemented systems.

In setting out a baseline study of this new area, Gelb and Diofasi Metz recognize that there is no single ideal model for a perfect identification system. Developing countries are at different stages of identity management, implying different sets of priorities and readiness to make use of the latest identification technologies. There are also major differences in the acceptability of certain system features, such as the use of a common identifier across various programs, even among the OECD countries. There are, however, a number of common principles that any good ID system should follow—it should be inclusive, robust, and effective, and be governed in a way that builds and sustains trust. In the last chapter, the authors lay out some practical recommendations on how to ensure that new ID programs live up to these principles, drawing on the many cases presented in the book.

The book turns a spotlight on some leading examples, including those in Peru and Estonia, and the remarkable Aadhaar program in India. These centrally managed systems all have important lessons for other countries; the newest of these, in India, has set many innovation benchmarks and is underpinning the largest reforms in social transfers, subsidies, and other schemes in the world, as well as serving as a platform for services. Recognizing the relentless rise of digital societies and economies, Gelb and Diofasi Metz also cover recent developments in federated ID and identification through e-village social networks. These approaches are not substitutes for centrally managed, foundational identity, but their capabilities are growing as the cloud of digital data around each of us increases.

How does the identification revolution relate to development policy and to the programs of development institutions? Donors and partners have been quite extensively involved in supporting a large number of diverse identification initiatives across many countries. These ID programs have, however, been viewed as mechanisms to support relatively narrow objectives, for example, to identify beneficiaries for a health or social transfer program, rather than in the context of a coherent identification strategy for the country or region. This is beginning to change, with more organizations adopting a strategic view. A first step has been taken with the sign-on to the ten Principles on Identification for Sustainable Development by almost all of the significant development players in the area. But—as explained in the book—much more needs to be done before the identification revolution delivers on its promise.

Though far more monitoring and far more rigorous research are needed to fully understand the implications of the identification revolution and its impact, this is the right time to take stock of this rapidly evolving area since ongoing policy decisions in many countries promise to map out ID trajectories for years into the future. It is our hope that this book, and CGD’s ongoing technology and development research program, will contribute to furthering that understanding and lead to better policies and outcomes for people in developing countries.

Masood Ahmed

PRESIDENT

CENTER FOR GLOBAL DEVELOPMENT

Acknowledgments

This book draws on studies conducted over a number of years and on academic and operational interactions, including discussions with participants at many conferences and workshops. We are grateful to Nancy Birdsall for urging us to write it and to the many experts from whom we have learned so much over the years. CGD colleagues, including Masood Ahmed, Charles Kenny, Todd Moss, Anit Mukherjee, and Emily Schabacker, have provided helpful comments; Julia Clark and Caroline Decker, formerly at the Center, contributed to the work program at earlier stages. We owe large debts to colleagues outside of CGD, including Robert Palacios, Joseph Atick, Keith Breckenridge, Simon Szreter, Jacqueline Bhabha, Himanshu Nagpal, Shahid Yusuf, and Vasumathi Anadan, who provided very thoughtful comments on the manuscript; several of these have also been instrumental in the development of the ideas in this book. We also want to recognize, with thanks, the time that many other industry experts, government officials, and academics have been willing to share with us.

Especially in a relatively new area, meetings and conferences are essential for exchanging information. Among the many, we must single out the annual ID4Africa meetings in Dar es Salaam, Kigali, and Windhoek. These have provided a unique forum to improve our understanding of the evolving ID situation in Africa, as well as in other regions. The meetings of the Digital Identity Forum in The Hague and Johannesburg have also been formative, and we have greatly appreciated the many insights from the Bhalisa Forum and from Jaap van der Straaten of CRC4D. We would also like to acknowledge productive interactions with colleagues at the ID4D initiative at the World Bank, including joint work and collaboration on the Principles on Identification which, to date, have been endorsed by twenty-one organizations.

The initial research that led up to this product was supported by the UK Department for International Development as part of its programmatic support to the Center. We are also grateful to the Omidyar Network and to the Bill & Melinda Gates Foundation for their generous support at various stages of preparation.

None of those mentioned above bears any responsibility for errors and shortcomings; these would doubtless have been far more serious without their support and advice. Needless to say, the views expressed are those of the authors and should not necessarily be attributed to any of the individuals or organizations noted above.

CGD is grateful for contributions from the Bill & Melinda Gates Foundation, the Omidyar Network, and the UK Department for International Development in support of this work.

ONE

Introduction

In India, proving your identity is only a fingerprint scan away. In less than seven years, more than 1.1 billion residents have enrolled in what must be the most innovative identification system in the developing world. Each resident can now authenticate themselves at banks, government offices, shops, and a host of other point-of-service facilities across the country by providing only their unique Aadhaar ID number and either a fingerprint or iris scan. Using the number and a scan, they can satisfy Know-Your-Customer (KYC) requirements to open bank accounts, with no need to laboriously assemble and copy documents. Beneficiaries of the country’s public distribution system are increasingly authenticated through fingerprint scans when they receive their subsidized food allocations through Fair Price Shops. In Andhra Pradesh’s Krishna District, where reforms are most advanced, the supply chain for the public distribution system has been totally revamped. Deliveries are checked on electronic scales and must be signed off jointly by the transport operator delivering the goods and the Fair Price Shop proprietor, each certifying by registering their ID number and fingerprint.

The same identification system can be used in an unlimited range of transactions and interactions: to receive pensions and administer scholarship programs, to monitor the attendance records of public officials, or to administer energy or fertilizer subsidy programs. India’s Aadhaar-enabled reforms of liquefied petroleum gas marketing have shifted household price subsidies to direct transfers into bank accounts; they are already among the world’s largest reforms in the energy sector. Measures are now under way to extend the use of the system to an ever-widening range of applications, such as registering property, filing taxes, and identifying children for school meal programs. Digital payment is now possible from any Aadhaar-linked bank account to any other account simply with the payee’s Aadhaar number.

More advanced digital services are also in progress. Indian residents will soon be able to sign documents electronically and to store key credentials, such as digitally certified copies of birth or school examination certificates, in a secure digital locker opened by a biometric scan. Documents can be shared as desired with potential employers or other entities linked to the country’s digital ecosystem. The process even distinguishes between copies of certificates uploaded by the applicant and those directly issued and certified by the relevant authority.

Such a sophisticated system has become possible only recently. Before it demonstrated its capabilities, there was considerable doubt over whether biometric technology would be precise enough to successfully distinguish among individuals in so large a population. Comparing every one of India’s people against each of the others to ensure that identities are unique involves a huge number of pairwise comparisons and requires extremely high accuracy. This accuracy appears to have been achieved—proof-of-concept tests conducted in 2012 suggest an error rate in deduplication of less than 7 in one trillion (Gelb and Clark 2013b).

India’s system offers capabilities far ahead of those available to residents of other countries, even those in the Organization for Economic Cooperation and Development (OECD). It also appears to be the lowest-cost digital identification system on a per-head basis, by a considerable margin. But it is only one of many transformative identification programs being implemented today, in some cases with significant technology and institutional innovations. National ID programs intended to provide foundational identification for multiple purposes are being rolled out across the developing world at an unprecedented pace. Functional identification programs, designed to support a particular purpose or service such as access to healthcare, a pensions program, or voting, have also mushroomed in the past decade and a half. Virtually all of these programs incorporate digital technology, including biometrics.

The right to a recognized identity has long been an element in the human rights agenda. The 1948 International Declaration of Human Rights, for instance, contains the right to recognition before the law and the right to a nationality. Yet it was only in 2015, with the adoption of the Sustainable Development Goals (SDGs), that the global community recognized identification as a development priority. SDG target 16.9 sets out to provide legal identity to all, including through birth registration, by 2030 (UN 2015). It is not entirely clear how to interpret this target, or whether a simple enumeration of those with and without legal identity is a sufficient metric. The only quantitative indicator attached to SDG target 16.9 refers to birth registration: the percentage of children under age 5 whose births have been registered with a civil authority, disaggregated by age. However, ensuring that all members of society—no matter how poor or isolated they may be—have their existence officially recognized is only a start.

Robust identification systems designed and implemented with the SDG aspirations in mind can be a catalyst for achieving many other development goals and targets, from gender equality to environmentally sustainable energy systems. For these ambitions to become a reality, formal identification systems must open doors rather than lock in hardship, and be used to expand freedoms and capabilities rather than enable exclusion or coercion.

Although the legal identity target is new, donors and partners have supported many identification programs in developing countries over the past two decades. However, with only a few notable exceptions, engagement has been fragmented and driven by individual applications. Identification has been considered as a mechanism for a particular purpose, such as improving the accuracy of a voter roll for a particular election or implementing a social transfer or health insurance program more effectively. This has encouraged the emergence of multiple ID programs, often disconnected and with little or no synergies between them—an inefficient and wasteful approach, considering that programs to register people and provide identification services are inherently multiple-use investments. The stakes are raised as they include higher levels of technology that boost their capabilities but also increase their costs and threaten the sustainability of fragmented systems.

What are the implications of the rapidly changing identification capabilities and new aspirations for development policies and programs? How should countries and their development partners respond to the identification revolution? Any effort to address these questions has to recognize that knowledge gaps are large; these are still early days in the identification revolution. Far more evidence, and far more rigorous evidence, is needed to understand the longer-term impact of the new systems and their underlying technologies. Only a limited number have been analyzed in any detail, and even in those cases the systems and their uses are still evolving. Nevertheless, this is a good time to take stock of ID programs and policies, especially as the development discourse around them needs to respond to the SDG target for establishing legal identity for all.

This book aims to provide an overview of the rapidly changing area of identification, including evidence on positive effects, good practices, and innovative solutions, and at the same time pinpoint the need to address crucial risks. It should be of interest to policymakers and development partners that invest in and implement ID programs, or are planning to do so; development practitioners, including the staff of international financial institutions (IFIs), multilateral organizations, and donors that want to learn more about systems and technologies that can accelerate the achievement of the SDGs; and researchers, academics, and others who would like to gain a better understanding of how new ID technologies can be and are being used.

Robust and inclusive identification systems can be an important pillar of sustainable development, particularly when leveraged by new technologies that greatly increase their accessibility, precision, and usefulness. The emerging evidence suggests that, at their best, they can be a tool to recognize and realize individual rights and expand economic opportunities, including for the poorest segments of society. They also can help build state capacity to deliver public services and social protection programs more effectively, to manage public spending, and to make public institutions more accountable. With the adoption of the legal identity SDG target 16.9, policymakers and practitioners alike are seeing the appeal of a more strategic approach to the role of identification in countries’ development strategies. Such an approach requires a stronger focus on multipurpose country systems, including both civil registration and identification, rather than simply seeing each possible use-case as a separate venture.

Yet success is not guaranteed. Achieving positive development outcomes depends on many factors, including the design of the systems and how effectively they are implemented on the ground. At their worst, they can exacerbate existing problems and introduce new ones. The formalization of identification processes and requirements can exclude poor and vulnerable groups and support institutionalized discrimination; ID systems can also facilitate state and commercial surveillance. Even in less unfavorable contexts, they can waste valuable resources on costly programs of little value, especially as more expensive technologies are employed. Not surprisingly, views differ on the contribution that such systems can make to development and the possible ways to balance potential gains and risks.

This book will not delve deeply into all details of the current systems, as these details are evolving, in some cases rapidly. Nor will it produce a manual for digital identification systems or advocate for any particular system as a model for all countries; doing so would be neither realistic nor appropriate. However, even from the emerging evidence to date, it is possible to outline sensible guidelines and approaches that will enable the identification revolution to help achieve many of the wide-ranging development outcomes articulated by the SDGs. The authors’ more modest objective is to contribute to this process.

Why Does Identification Matter for Development?

All communities—families, bands, tribes, nations—require mechanisms to establish and manage the identities of their members. Identity can have many interpretations. In this discussion, identity comprises the range of attributes that go into defining a person as a distinct and unique individual.¹ Some attributes may relate to appearance, others to behavior, still others to ethnicity, friendships and family connections, or the details of a person’s birth—date, location, and parentage. Within any community, individual identity is linked to rights, entitlements, and responsibilities, including the critical question of whether or not an individual is recognized as a member of that community. The ability to distinguish between people is essential to administer community affairs, including security, as well as to establish and enforce private contracts.

Establishing an identity—one that exists and is unique—can pose a challenge even in the richest countries. Alecia Faith Pennington, the girl who does not exist, was born in Texas to conservative religious parents. Her birth was purposefully not recorded, this being seen by her parents as a way of making her sovereign and independent from the wider, more secular, society. She lived on a farm, was homeschooled, and her medical treatment was provided in ways that left no medical records. Her plight became apparent in September 2014 when she left home at the age of 19, only to find that she was unable to provide sufficient documentary proof of her actual existence to obtain a birth certificate. Without some proof of existence, she could not function in society or the U.S. economy. She could not apply for a Social Security number to work or a license to drive; nor could she hold a bank account. She was not covered by existing provisions for aliens or refugees; they came from somewhere, but she came from nowhere. Her situation was only resolved by the passage of a special bill, HB 2794, which was signed into law in Texas in June 2015.²

Validating oneself against a known identity can also be a challenge. One celebrated case is the still-debated story of Martin Guerre, a French peasant who disappeared from his village and his wife, Bertrande, in 1548, only to apparently reappear in 1556. The arrival looked similar to the man who had vanished and could support his claim to be Martin with detailed knowledge of his previous life. He was accepted as Martin by Bertrande and lived with her for three years, and he also claimed the inheritance of Guerre’s deceased father. He was, however, not accepted as Martin by other members of Guerre’s family, who continued to search for the true Martin. The case was finally resolved after the appearance of another man with a wooden leg who claimed to be Martin Guerre, although he was apparently less able to recall previous details of his life with Bertrande than the first arrival. After a series of legal proceedings, the second arrival was accepted as the true Martin by Bertrande and other members of the family. The imposter confessed and was hanged.³

There are millions—by some estimates, over 1.1 billion—Alecias and Martins living today: people who do not have an officially recognized identity or are not able to provide necessary proof of who they are. They live mostly in poor countries and are usually among the poorest and most marginalized members of their societies.⁴ The global identification and identity verification gap limit the freedoms and capabilities of the individuals directly affected, and can have system-wide